Andrew Hannay, director at RobMac reviews the recent budget and explores the options for savers.
The Chancellor, Rishi Sunak made clear in his budget presentation that the COVID-19 hike was huge and would have to be met ultimately by the UK taxpayer.
Much of the initial burden will fall upon corporate taxpayers and no one will object if the Amazons of this world pay their way. However, the individual taxpayer has already seen the freezing of many allowances and with the certainty of more to come now is the time to plan ahead and make full use of the allowances as they are.
Forward thinking savers should consider:
Maximising ISA allowances £ 20,000
Using their Junior Isa allowance. £ 9,000
Using their Capital Gains Tax Allowance £ 12,300
Maximising pension payments £ 40,000
This is also a good time to review your portfolio of investments e.g. hold more UK socks or looking at bond allocations. And have a deep look into your pension arrangements to see if there are issues relating to the freezing of the life time allowance.
On other fronts it is good news that the Stamp Duty holiday (England and N Ireland) has been extended and many parents and their adult children will be encouraged by the the Government backed 95% loan scheme.
There is still time to take advantage of allowances for this tax year, but you will need to get your skates on. As ever take advice.
A word of warning
As a footnote you may have seen details of a collapsed German property company where many UK Pension holders have lost their life savings. I think investors were being promised 8% annual returns. Impossible to achieve in any market place at the moment, especially when commissions of between 20 and 30% of the investment were beIng paid to the broker for his or her introduction.
This is desperately sad news and tells me that we all need to be on our guard. Do not invest in anything that sounds too good to true or is not covered under UK financial regulations.
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